Final answer:
Besides overseeing Fannie Mae and Freddie Mac, the FHFA also manages federal housing assistance programs, but it does not supervise commercial banks or conduct U.S. monetary policy, as these tasks fall to other regulatory bodies.
Step-by-step explanation:
The Federal Housing Finance Agency (FHFA) does more than just oversee Fannie Mae and Freddie Mac. While option A), regulating mortgage lending institutions, is a part of its broader regulatory scope, the most accurate choice that reflects its other activities is managing federal housing assistance programs (B).
The FHFA does not monitor the financial stability of commercial banks (C) as that is a responsibility of institutions like the Office of the Comptroller of the Currency and the Federal Reserve.
Nor does it conduct monetary policy for the U.S. economy (D), which is the role of the Federal Reserve. In addition to its regulatory duties, the FHFA also works towards ensuring that banks comply with various consumer protection laws and practices, such as non-discriminatory lending and transparent loan disclosure.